BILL REQ. #:  S-4316.1 

Read first time 02/01/10.   Referred to Committee on Ways & Means.

     AN ACT Relating to naming credits against the state sales tax; amending RCW 82.14.370, 82.14.0485, 82.14.390, 82.14.0494, 82.14.415, 82.14.465, 67.28.180, 82.14.480, and 82.14.475; and providing an expiration date.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

Sec. 1   RCW 82.14.370 and 2009 c 511 s 1 are each amended to read as follows:
     (1) The legislative authority of a rural county may impose a sales and use tax in accordance with the terms of this chapter. The tax is in addition to other taxes authorized by law and ((shall)) must be collected from those persons who are taxable by the state under chapters 82.08 and 82.12 RCW upon the occurrence of any taxable event within the county. The rate of tax ((shall)) may not exceed 0.09 percent of the selling price in the case of a sales tax or value of the article used in the case of a use tax, except that for rural counties with population densities between sixty and one hundred persons per square mile, the rate ((shall)) may not exceed 0.04 percent before January 1, 2000.
     (2) The tax imposed under subsection (1) of this section ((shall)) must be deducted from the amount of tax otherwise required to be collected or paid over to the department ((of revenue)) under chapter 82.08 or 82.12 RCW. The department ((of revenue shall)) must perform the collection of such taxes on behalf of the county at no cost to the county.
     (3)(a) Moneys collected under this section ((shall)) may only be used to finance public facilities serving economic development purposes in rural counties and finance personnel in economic development offices. The public facility must be listed as an item in the officially adopted county overall economic development plan, or the economic development section of the county's comprehensive plan, or the comprehensive plan of a city or town located within the county for those counties planning under RCW 36.70A.040. For those counties that do not have an adopted overall economic development plan and do not plan under the growth management act, the public facility must be listed in the county's capital facilities plan or the capital facilities plan of a city or town located within the county.
     (b) In implementing this section, the county ((shall)) must consult with cities, towns, and port districts located within the county and the associate development organization serving the county to ensure that the expenditure meets the goals of chapter 130, Laws of 2004 and the requirements of (a) of this subsection. Each county collecting money under this section ((shall)) must report, as follows, to the office of the state auditor, within one hundred fifty days after the close of each fiscal year: (i) A list of new projects begun during the fiscal year, showing that the county has used the funds for those projects consistent with the goals of chapter 130, Laws of 2004 and the requirements of (a) of this subsection; and (ii) expenditures during the fiscal year on projects begun in a previous year. Any projects financed prior to June 10, 2004, from the proceeds of obligations to which the tax imposed under subsection (1) of this section has been pledged ((shall)) are not ((be)) deemed to be new projects under this subsection. No new projects funded with money collected under this section may be for justice system facilities.
     (c) The definitions in this section apply throughout this section.
     (i) "Public facilities" means bridges, roads, domestic and industrial water facilities, sanitary sewer facilities, earth stabilization, storm sewer facilities, railroad, electricity, natural gas, buildings, structures, telecommunications infrastructure, transportation infrastructure, or commercial infrastructure, and port facilities in the state of Washington.
     (ii) "Economic development purposes" means those purposes which facilitate the creation or retention of businesses and jobs in a county.
     (iii) "Economic development office" means an office of a county, port districts, or an associate development organization as defined in RCW 43.330.010, which promotes economic development purposes within the county.
     (4) No tax may be collected under this section before July 1, 1998.
     (a) Except as provided in (b) of this subsection, no tax may be collected under this section by a county more than twenty-five years after the date that a tax is first imposed under this section.
     (b) For counties imposing the tax at the rate of 0.09 percent before August 1, 2009, the tax expires on the date that is twenty-five years after the date that the 0.09 percent tax rate was first imposed by that county.
     (5) For purposes of this section, "rural county" means a county with a population density of less than one hundred persons per square mile or a county smaller than two hundred twenty-five square miles as determined by the office of financial management and published each year by the department for the period July 1st to June 30th.
     (6) The funding mechanism under this section is known as, and cited as, the "state rural county credit." After the effective date of this act, the department and counties, must refer to the funding mechanism under this section in any forms, publications, or any other documents, either newly created or updated, by the term "state rural county credit."

Sec. 2   RCW 82.14.0485 and 1995 3rd sp.s. c 1 s 101 are each amended to read as follows:
     (1) The legislative authority of a county with a population of one million or more may impose a sales and use tax in accordance with the terms of this chapter. The tax is in addition to other taxes authorized by law and ((shall)) must be collected from those persons who are taxable by the state under chapters 82.08 and 82.12 RCW upon the occurrence of any taxable event within the county. The rate of tax ((shall)) may not exceed 0.017 percent of the selling price in the case of a sales tax or value of the article used in the case of a use tax.
     (2) The tax imposed under subsection (1) of this section ((shall)) must be deducted from the amount of tax otherwise required to be collected or paid over to the department of revenue under chapter 82.08 or 82.12 RCW. The department ((of revenue shall)) must perform the collection of such taxes on behalf of the county at no cost to the county.
     (3) Moneys collected under this section ((shall)) may only be used for the purpose of paying the principal and interest payments on bonds issued by a county to construct a baseball stadium.
     (4) No tax may be collected under this section before January 1, 1996, and no tax may be collected under this section unless the taxes under RCW 82.14.360 are being collected. The tax imposed in this section ((shall)) expires when the bonds issued for the construction of the baseball stadium are retired, but not more than twenty years after the tax is first collected.
     (5) As used in this section, "baseball stadium" means a baseball stadium with natural turf and a retractable roof or canopy, together with associated parking facilities, constructed in the largest city in a county with a population of one million or more.
     (6) The funding mechanism under this section is known as, and cited as, the "state baseball stadium credit." After the effective date of this act, the department and counties must refer to the funding mechanism under this section in any forms, publications, or any other documents, either newly created or updated, by the term "state baseball stadium credit."

Sec. 3   RCW 82.14.390 and 2008 c 48 s 1 are each amended to read as follows:
     (1) Except as provided in subsection (7) of this section, the governing body of a public facilities district (a) created before July 31, 2002, under chapter 35.57 or 36.100 RCW that commences construction of a new regional center, or improvement or rehabilitation of an existing new regional center, before January 1, 2004; (b) created before July 1, 2006, under chapter 35.57 RCW in a county or counties in which there are no other public facilities districts on June 7, 2006, and in which the total population in the public facilities district is greater than ninety thousand that commences construction of a new regional center before February 1, 2007; (c) created under the authority of RCW 35.57.010(1)(d); or (d) created before September 1, 2007, under chapter 35.57 or 36.100 RCW, in a county or counties in which there are no other public facilities districts on July 22, 2007, and in which the total population in the public facilities district is greater than seventy thousand, that commences construction of a new regional center before January 1, 2009, or before January 1, 2011, in the case of a new regional center in a county designated by the president as a disaster area in December 2007, may impose a sales and use tax in accordance with the terms of this chapter. The tax is in addition to other taxes authorized by law and ((shall)) must be collected from those persons who are taxable by the state under chapters 82.08 and 82.12 RCW upon the occurrence of any taxable event within the public facilities district. The rate of tax ((shall)) may not exceed 0.033 percent of the selling price in the case of a sales tax or value of the article used in the case of a use tax.
     (2)(a) The governing body of a public facilities district imposing a sales and use tax under the authority of this section may increase the rate of tax up to 0.037 percent if, within three fiscal years of July 1, 2008, the department determines that, as a result of RCW 82.14.490 and the chapter 6, Laws of 2007 amendments to RCW 82.14.020, a public facilities district's sales and use tax collections for fiscal years after July 1, 2008, have been reduced by a net loss of at least 0.50 percent from the fiscal year before July 1, 2008. The fiscal year in which this section becomes effective is the first fiscal year after July 1, 2008.
     (b) The department ((shall)) must determine sales and use tax collection net losses under this section as provided in RCW 82.14.500 (2) and (3). The department ((shall)) must provide written notice of its determinations to public facilities districts. Determinations by the department of a public facilities district's sales and use tax collection net losses as a result of RCW 82.14.490 and the chapter 6, Laws of 2007 amendments to RCW 82.14.020 are final and not appealable.
     (c) A public facilities district may increase its rate of tax after it has received written notice from the department as provided in (b) of this subsection. The increase in the rate of tax must be made in 0.001 percent increments and must be the least amount necessary to mitigate the net loss in sales and use tax collections as a result of RCW 82.14.490 and the chapter 6, Laws of 2007 amendments to RCW 82.14.020. The increase in the rate of tax is subject to RCW 82.14.055.
     (3) The tax imposed under subsection (1) of this section ((shall)) must be deducted from the amount of tax otherwise required to be collected or paid over to the department ((of revenue)) under chapter 82.08 or 82.12 RCW. The department ((of revenue shall)) must perform the collection of such taxes on behalf of the county at no cost to the public facilities district.
     (4) No tax may be collected under this section before August 1, 2000. The tax imposed in this section ((shall)) expires when the bonds issued for the construction of the regional center and related parking facilities are retired, but not more than twenty-five years after the tax is first collected.
     (5) Moneys collected under this section ((shall)) may only be used for the purposes set forth in RCW 35.57.020 and must be matched with an amount from other public or private sources equal to thirty-three percent of the amount collected under this section, provided that amounts generated from nonvoter approved taxes authorized under chapter 35.57 RCW or nonvoter approved taxes authorized under chapter 36.100 RCW ((shall)) do not constitute a public or private source. For the purpose of this section, public or private sources includes, but is not limited to cash or in-kind contributions used in all phases of the development or improvement of the regional center, land that is donated and used for the siting of the regional center, cash or in-kind contributions from public or private foundations, or amounts attributed to private sector partners as part of a public and private partnership agreement negotiated by the public facilities district.
     (6) The combined total tax levied under this section ((shall)) may not be greater than 0.037 percent. If both a public facilities district created under chapter 35.57 RCW and a public facilities district created under chapter 36.100 RCW impose a tax under this section, the tax imposed by a public facilities district created under chapter 35.57 RCW ((shall)) must be credited against the tax imposed by a public facilities district created under chapter 36.100 RCW.
     (7) A public facilities district created under chapter 36.100 RCW is not eligible to impose the tax under this section if the legislative authority of the county where the public facilities district is located has imposed a sales and use tax under RCW 82.14.0485 or 82.14.0494.
     (8) The funding mechanism under this section is known as, and cited as, the "state public facilities district credit." After the effective date of this act, the department and public facilities districts, must refer to the funding mechanism under this section in any forms, publications, or any other documents, either newly created or updated, by the term "state public facilities district credit."

Sec. 4   RCW 82.14.0494 and 1997 c 220 s 204 are each amended to read as follows:
     (1) The legislative authority of a county that has created a public stadium authority to develop a stadium and exhibition center under RCW 36.102.050 may impose a sales and use tax in accordance with this chapter. The tax is in addition to other taxes authorized by law and ((shall)) must be collected from those persons who are taxable by the state under chapters 82.08 and 82.12 RCW upon the occurrence of any taxable event within the county. The rate of tax ((shall be)) is 0.016 percent of the selling price in the case of a sales tax or value of the article used in the case of a use tax.
     (2) The tax imposed under subsection (1) of this section ((shall)) must be deducted from the amount of tax otherwise required to be collected or paid over to the department ((of revenue)) under chapter 82.08 or 82.12 RCW. The department ((of revenue shall)) must perform the collection of such taxes on behalf of the county at no cost to the county.
     (3) Before the issuance of bonds in RCW 43.99N.020, all revenues collected on behalf of the county under this section ((shall)) must be transferred to the public stadium authority. After bonds are issued under RCW 43.99N.020, all revenues collected on behalf of the county under this section ((shall)) must be deposited in the stadium and exhibition center account under RCW 43.99N.060.
     (4) The definitions in RCW 36.102.010 apply to this section.
     (5) This section expires on the earliest of the following dates:
     (a) December 31, 1999, if the conditions for issuance of bonds under RCW 43.99N.020 have not been met before that date;
     (b) The date on which all bonds issued under RCW 43.99N.020 have been retired; or
     (c) Twenty-three years after the date the tax under this section is first imposed.
     (6) The funding mechanism under this section is known as, and cited as, the "state stadium and exhibition center credit." After the effective date of this act, the department, any counties, and a public stadium authority must refer to the funding mechanism under this section in any forms, publications, or any other documents, either newly created or updated, by the term "state stadium and exhibition center credit."

Sec. 5   RCW 82.14.415 and 2009 c 550 s 1 are each amended to read as follows:
     (1) The legislative authority of any city that is located in a county with a population greater than six hundred thousand that annexes an area consistent with its comprehensive plan required by chapter 36.70A RCW((,)) may impose a sales and use tax in accordance with the terms of this chapter. The tax is in addition to other taxes authorized by law and ((shall)) must be collected from those persons who are taxable by the state under chapters 82.08 and 82.12 RCW upon the occurrence of any taxable event within the city. The tax may only be imposed by a city if:
     (a) The city has commenced annexation of an area having a population of at least ten thousand people, or four thousand in the case of a city described under subsection (3)(a)(i) of this section, prior to January 1, 2015; and
     (b) The city legislative authority determines by resolution or ordinance that the projected cost to provide municipal services to the annexation area exceeds the projected general revenue that the city would otherwise receive from the annexation area on an annual basis.
     (2) The tax authorized under this section is a credit against the state tax under chapter 82.08 or 82.12 RCW. The department ((of revenue shall)) must perform the collection of such taxes on behalf of the city at no cost to the city and ((shall)) must remit the tax to the city as provided in RCW 82.14.060.
     (3)(a) Except as provided in (b) of this subsection, the maximum rate of tax any city may impose under this section is:
     (i) 0.1 percent for each annexed area in which the population is greater than ten thousand and less than twenty thousand. The ten thousand population threshold in this subsection (3)(a)(i) is four thousand for a city with a population between one hundred fifteen thousand and one hundred forty thousand and located within a county with a population over one million five hundred thousand; and
     (ii) 0.2 percent for an annexed area in which the population is greater than twenty thousand.
     (b) Beginning July 1, 2011, the maximum rate of tax imposed under this section is 0.85 percent for an annexed area in which the population is greater than eighteen thousand if the annexed area was, prior to November 1, 2008, officially designated as a potential annexation area by more than one city, one of which has a population greater than four hundred thousand.
     (4)(a) Except as provided in (b) of this subsection, the maximum cumulative rate of tax a city may impose under subsection (3)(a) of this section is 0.2 percent for the total number of annexed areas the city may annex.
     (b) The maximum cumulative rate of tax a city may impose under subsection (3)(a) of this section is 0.3 percent, beginning July 1, 2011, if the city commenced annexation of an area, prior to January 1, 2010, that would have otherwise allowed the city to increase the rate of tax imposed under this section absent the rate limit imposed in (a) of this subsection.
     (c) The maximum cumulative rate of tax a city may impose under subsection (3)(b) of this section is 0.85 percent for the single annexed area the city may annex and the amount of tax distributed to a city under subsection (3)(b) of this section ((shall)) may not exceed five million dollars per fiscal year.
     (5) The tax imposed by this section ((shall)) may only be imposed at the beginning of a fiscal year and ((shall)) continues for no more than ten years from the date that each increment of the tax is first imposed. Tax rate increases due to additional annexed areas ((shall be)) are effective on July 1st of the fiscal year following the fiscal year in which the annexation occurred, provided that notice is given to the department as set forth in subsection (9) of this section.
     (6) All revenue collected under this section ((shall)) must be used solely to provide, maintain, and operate municipal services for the annexation area.
     (7) The revenues from the tax authorized in this section may not exceed that which the city deems necessary to generate revenue equal to the difference between the city's cost to provide, maintain, and operate municipal services for the annexation area and the general revenues that the cities would otherwise expect to receive from the annexation during a year. If the revenues from the tax authorized in this section and the revenues from the annexation area exceed the costs to the city to provide, maintain, and operate municipal services for the annexation area during a given year, the city ((shall)) must notify the department and the tax distributions authorized in this section ((shall)) must be suspended for the remainder of the year.
     (8) No tax may be imposed under this section before July 1, 2007. Before imposing a tax under this section, the legislative authority of a city ((shall)) must adopt an ordinance that includes the following:
     (a) A certification that the amount needed to provide municipal services to the annexed area reflects the city's true and actual costs;
     (b) The rate of tax under this section that ((shall be)) is imposed within the city; and
     (c) The threshold amount for the first fiscal year following the annexation and passage of the ordinance.
     (9) The tax ((shall)) must cease to be distributed to the city for the remainder of the fiscal year once the threshold amount has been reached. No later than March 1st of each year, the city ((shall)) must provide the department with a certification of the city's true and actual costs to provide municipal services to the annexed area, a new threshold amount for the next fiscal year, and notice of any applicable tax rate changes. Distributions of tax under this section ((shall)) begin again on July 1st of the next fiscal year and continue until the new threshold amount has been reached or June 30th, whichever is sooner. Any revenue generated by the tax in excess of the threshold amount ((shall)) belongs to the state of Washington. Any amount resulting from the threshold amount less the total fiscal year distributions, as of June 30th, ((shall)) may not be carried forward to the next fiscal year.
     (10) The tax ((shall)) must cease to be distributed to a city imposing the tax under subsection (3)(b) of this section for the remainder of the fiscal year, if the total distributions to the city imposing the tax exceed five million dollars for the fiscal year.
     (11) The following definitions apply throughout this section unless the context clearly requires otherwise:
     (a) "Annexation area" means an area that has been annexed to a city under chapter 35.13 or 35A.14 RCW. "Annexation area" includes all territory described in the city resolution.
     (b) "Commenced annexation" means the initiation of annexation proceedings has taken place under the direct petition method or the election method under chapter 35.13 or 35A.14 RCW.
     (c) "Department" means the department of revenue.
     (d) "Municipal services" means those services customarily provided to the public by city government.
     (e) "Fiscal year" means the year beginning July 1st and ending the following June 30th.
     (f) "Potential annexation area" means one or more geographic areas that a city has officially designated for potential future annexation, as part of its comprehensive plan adoption process under the state growth management act, chapter 36.70A RCW.
     (g) "Threshold amount" means the maximum amount of tax distributions as determined by the city in accordance with subsection (7) of this section that the department ((shall)) distributes to the city generated from the tax imposed under this section in a fiscal year.
     (12) The funding mechanism under this section is known as, and cited as, the "state annexation credit." After the effective date of this act, the department and cities must refer to the funding mechanism under this section in any forms, publications, or any other documents, either newly created or updated, by the term "state annexation credit."

Sec. 6   RCW 82.14.465 and 2009 c 535 s 1109 are each amended to read as follows:
     (1) A city, town, or county that creates a benefit zone and finances public improvements pursuant to chapter 39.100 RCW may impose a sales and use tax in accordance with the terms of this chapter and subject to the criteria set forth in this section. Except as provided in this section, the tax is in addition to other taxes authorized by law and ((shall)) must be collected from those persons who are taxable by the state under chapters 82.08 and 82.12 RCW upon the occurrence of any taxable event within the taxing jurisdiction of the city, town, or county. The rate of tax ((shall)) may not exceed the rate provided in RCW 82.08.020(1) in the case of a sales tax or a use tax, less the aggregate rates of any other taxes imposed on the same events that are credited against the state taxes imposed under chapters 82.08 and 82.12 RCW. The tax rate ((shall)) must be no higher than what is reasonably necessary for the local government to receive its entire annual state contribution in a ten-month period of time.
     (2) The tax imposed under subsection (1) of this section ((shall)) must be deducted from the amount of tax otherwise required to be collected or paid over to the department under chapter 82.08 or 82.12 RCW. The department ((shall)) must perform the collection of such taxes on behalf of the city, town, or county at no cost to the city, town, or county.
     (3) No tax may be imposed under this section before July 1, 2007. Before imposing a tax under this section, the city, town, or county ((shall)) must first have received tax allocation revenues during the preceding calendar year. The tax imposed under this section ((shall)) expires on the earlier of the date: (a) The tax allocation revenues are no longer used for public improvements and public improvement costs; (b) the bonds issued under the authority of chapter 39.100 RCW are retired, if the bonds are issued; or (c) that is thirty years after the tax is first imposed.
     (4) An ordinance adopted by the legislative authority of a city, town, or county imposing a tax under this section ((shall)) must provide that:
     (a) The tax ((shall)) must first be imposed on the first day of a fiscal year;
     (b) The amount of tax received by the local government in any fiscal year ((shall)) may not exceed the amount of the state contribution;
     (c) The tax ((shall)) must cease to be distributed for the remainder of any fiscal year in which either:
     (i) The amount of tax distributions totals the amount of the state contribution;
     (ii) The amount of tax distributions totals the amount of local public sources, dedicated in the previous calendar year to finance public improvements authorized under chapter 39.100 RCW, expended in the previous year for public improvement costs or used to pay for other bonds issued to pay for public improvements; or
     (iii) The amount of revenue from taxes imposed under this section by all cities, towns, and counties totals the annual state credit limit as provided in RCW 82.32.700(3);
     (d) The tax ((shall)) must be distributed again, should it cease to be distributed for any of the reasons provided in (c) of this subsection, at the beginning of the next fiscal year, subject to the restrictions in this section; and
     (e) Any revenue generated by the tax in excess of the amounts specified in (b) and (c) of this subsection ((shall)) belongs to the state of Washington.
     (5) If both a county and a city or town impose a tax under this section, the tax imposed by the city, town, or county ((shall)) must be credited as follows:
     (a) If the county has created a benefit zone before the city or town, the tax imposed by the county ((shall)) must be credited against the tax imposed by the city or town, the purpose of such credit is to give priority to the county tax; and
     (b) If the city or town has created a benefit zone before the county, the tax imposed by the city or town ((shall)) must be credited against the tax imposed by the county, the purpose of such credit is to give priority to the city or town tax.
     (6) The department ((shall)) must determine the amount of tax distributions attributable to each city, town, and county imposing a sales and use tax under this section and ((shall)) must advise a city, town, or county when the tax will cease to be distributed for the remainder of the fiscal year as provided in subsection (4)(c) of this section. Determinations by the department of the amount of taxes attributable to a city, town, or county are final and ((shall)) may not be used to challenge the validity of any tax imposed under this section. The department ((shall)) must remit any tax revenues in excess of the amounts specified in subsection (4)(b) and (c) of this section to the state treasurer who ((shall)) must deposit the moneys in the general fund.
     (7) The definitions in this subsection apply throughout this section and RCW 82.14.470 unless the context clearly requires otherwise.
     (a) "Base year" means the calendar year immediately following the creation of a benefit zone.
     (b) "Benefit zone" has the same meaning as provided in RCW 39.100.010.
     (c) "Excess local excise taxes" has the same meaning as provided in RCW 39.100.050.
     (d) "Excess state excise taxes" means the amount of excise taxes received by the state during the measurement year from taxable activity within the benefit zone over and above the amount of excise taxes received by the state during the base year from taxable activity within the benefit zone. However, if a local government creates the benefit zone and reasonably determines that no activity subject to tax under chapters 82.08 and 82.12 RCW occurred in the twelve months immediately preceding the creation of the benefit zone within the boundaries of the area that became the benefit zone, "excess state excise taxes" means the entire amount of state excise taxes the state receives during a calendar year period beginning with the calendar year immediately following the creation of the benefit zone and continuing with each measurement year thereafter.
     (e) "State excise taxes" means revenues derived from state retail sales and use taxes under chapters 82.08 and 82.12 RCW, less the amount of tax distributions from all local retail sales and use taxes imposed on the same taxable events that are credited against the state retail sales and use taxes under chapters 82.08 and 82.12 RCW except for the local tax authorized in this section.
     (f) "Fiscal year" has the same meaning as provided in RCW 39.100.030.
     (g) "Measurement year" means a calendar year, beginning with the calendar year following the base year and each calendar year thereafter, that is used annually to measure the amount of excess state excise taxes and excess local excise taxes.
     (h) "State contribution" means the lesser of two million dollars or an amount equal to excess state excise taxes received by the state during the preceding calendar year.
     (i) "Tax allocation revenues" has the same meaning as provided in RCW 39.100.010.
     (j) "Public improvements" and "public improvement costs" have the same meanings as provided in RCW 39.100.010.
     (k) "Local public sources" includes, but is not limited to, private monetary contributions, assessments, dedicated local government funds, and tax allocation revenues. "Local public sources" does not include local government funds derived from any state loan or state grant, any local tax that is credited against the state sales and use taxes, or any other state funds.
     (8) The funding mechanism under this section is known as, and cited as, the "state hospital benefit zone credit." After the effective date of this act, the department and any cities, towns, or counties, must refer to the funding mechanism under this section in any forms, publications, or any other documents, either newly created or updated, by the term "state hospital benefit zone credit."

Sec. 7   RCW 67.28.180 and 2007 c 189 s 1 are each amended to read as follows:
     (1) Subject to the conditions set forth in subsections (2) and (3) of this section, the legislative body of any county or any city, is authorized to levy and collect a special excise tax of not to exceed two percent on the sale of or charge made for the furnishing of lodging that is subject to tax under chapter 82.08 RCW.
     (2) Any levy authorized by this section ((shall be)) is subject to the following:
     (a) Any county ordinance or resolution adopted pursuant to this section ((shall)) must contain, in addition to all other provisions required to conform to this chapter, a provision allowing a credit against the county tax for the full amount of any city tax imposed pursuant to this section upon the same taxable event.
     (b)(i) In the event that any county has levied the tax authorized by this section and has, prior to June 26, 1975, either pledged the tax revenues for payment of principal and interest on city revenue or general obligation bonds authorized and issued pursuant to RCW 67.28.150 through 67.28.160 or has authorized and issued revenue or general obligation bonds pursuant to the provisions of RCW 67.28.150 through 67.28.160, such county ((shall be)) is exempt from the provisions of (a) of this subsection, to the extent that the tax revenues are pledged for payment of principal and interest on bonds issued at any time pursuant to the provisions of RCW 67.28.150 through 67.28.160: PROVIDED, That so much of such pledged tax revenues, together with any investment earnings thereon, not immediately necessary for actual payment of principal and interest on such bonds may be used: (((i))) (A) In any county with a population of one million or more, for repayment either of limited tax levy general obligation bonds or of any county fund or account from which a loan was made, the proceeds from the bonds or loan being used to pay for constructing, installing, improving, and equipping stadium capital improvement projects, and to pay for any engineering, planning, financial, legal and professional services incident to the development of such stadium capital improvement projects, regardless of the date the debt for such capital improvement projects was or may be incurred; (((ii))) (B) in any county with a population of one million or more, for repayment or refinancing of bonded indebtedness incurred prior to January 1, 1997, for any purpose authorized by this section or relating to stadium repairs or rehabilitation, including but not limited to the cost of settling legal claims, reimbursing operating funds, interest payments on short-term loans, and any other purpose for which such debt has been incurred if the county has created a public stadium authority to develop a stadium and exhibition center under RCW 36.102.030; or (((iii))) (C) in other counties, for county-owned facilities for agricultural promotion until January 1, 2009, and thereafter for any purpose authorized in this chapter.
     (ii) A county is exempt under this subsection with respect to city revenue or general obligation bonds issued after April 1, 1991, only if such bonds mature before January 1, 2013. If any county located east of the crest of the Cascade mountains has levied the tax authorized by this section and has, prior to June 26, 1975, pledged the tax revenue for payment of principal and interest on city revenue or general obligation bonds, the county is exempt under this subsection with respect to revenue or general obligation bonds issued after January 1, 2007, only if the bonds mature before January 1, 2021. Such a county may only use funds under this subsection (2)(b) for constructing or improving facilities authorized under this chapter, including county- owned facilities for agricultural promotion, and must perform an annual financial audit of organizations receiving funding on the use of the funds.
     (iii) As used in this subsection (2)(b), "capital improvement projects" may include, but not be limited to a stadium restaurant facility, restroom facilities, artificial turf system, seating facilities, parking facilities and scoreboard and information system adjacent to or within a county owned stadium, together with equipment, utilities, accessories and appurtenances necessary thereto. The stadium restaurant authorized by this subsection (2)(b) ((shall)) must be operated by a private concessionaire under a contract with the county.
     (c)(i) No city within a county exempt under subsection (2)(b) of this section may levy the tax authorized by this section so long as said county is so exempt.
     (ii) If bonds have been issued under RCW 43.99N.020 and any necessary property transfers have been made under RCW 36.102.100, no city within a county with a population of one million or more may levy the tax authorized by this section before January 1, 2021.
     (iii) However, in the event that any city in a county described in (i) or (ii) of this subsection (2)(c) has levied the tax authorized by this section and has, prior to June 26, 1975, authorized and issued revenue or general obligation bonds pursuant to the provisions of RCW 67.28.150 through 67.28.160, such city may levy the tax so long as the tax revenues are pledged for payment of principal and interest on bonds issued at any time pursuant to the provisions of RCW 67.28.150 through 67.28.160.
     (3) Any levy authorized by this section by a county that has levied the tax authorized by this section and has, prior to June 26, 1975, either pledged the tax revenues for payment of principal and interest on city revenue or general obligation bonds authorized and issued pursuant to RCW 67.28.150 through 67.28.160 or has authorized and issued revenue or general obligation bonds pursuant to the provisions of RCW 67.28.150 through 67.28.160 ((shall be)) is subject to the following:
     (a) Taxes collected under this section in any calendar year before 2013 in excess of five million three hundred thousand dollars ((shall)) must only be used as follows:
     (i) Seventy-five percent from January 1, 1992, through December 31, 2000, and seventy percent from January 1, 2001, through December 31, 2012, for art museums, cultural museums, heritage museums, the arts, and the performing arts. Moneys spent under this subsection (3)(a)(i) ((shall)) must be used for the purposes of this subsection (3)(a)(i) in all parts of the county.
     (ii) Twenty-five percent from January 1, 1992, through December 31, 2000, and thirty percent from January 1, 2001, through December 31, 2012, for the following purposes and in a manner reflecting the following order of priority: Stadium purposes as authorized under subsection (2)(b) of this section; acquisition of open space lands; youth sports activities; and tourism promotion. If all or part of the debt on the stadium is refinanced, all revenues under this subsection (3)(a)(ii) ((shall)) must be used to retire the debt.
     (b) From January 1, 2013, through December 31, 2015, in a county with a population of one million or more, all revenues under this section ((shall)) must be used to retire the debt on the stadium, or deposited in the stadium and exhibition center account under RCW 43.99N.060 after the debt on the stadium is retired.
     (c) From January 1, 2016, through December 31, 2020, in a county with a population of one million or more, all revenues under this section ((shall)) must be deposited in the stadium and exhibition center account under RCW 43.99N.060.
     (d) At least seventy percent of moneys spent under (a)(i) of this subsection for the period January 1, 1992, through December 31, 2000, ((shall)) must be used only for the purchase, design, construction, and remodeling of performing arts, visual arts, heritage, and cultural facilities, and for the purchase of fixed assets that will benefit art, heritage, and cultural organizations. For purposes of this subsection, fixed assets are tangible objects such as machinery and other equipment intended to be held or used for ten years or more. Moneys received under this subsection (3)(d) may be used for payment of principal and interest on bonds issued for capital projects. Qualifying organizations receiving moneys under this subsection (3)(d) must be financially stable and have at least the following:
     (i) A legally constituted and working board of directors;
     (ii) A record of artistic, heritage, or cultural accomplishments;
     (iii) Been in existence and operating for at least two years;
     (iv) Demonstrated ability to maintain net current liabilities at less than thirty percent of general operating expenses;
     (v) Demonstrated ability to sustain operational capacity subsequent to completion of projects or purchase of machinery and equipment; and
     (vi) Evidence that there has been independent financial review of the organization.
     (e) At least forty percent of the revenues distributed pursuant to (a)(i) of this subsection for the period January 1, 2001, through December 31, 2012, ((shall)) must be deposited in an account and ((shall)) must be used to establish an endowment. Principal in the account ((shall)) must remain permanent and irreducible. The earnings from investments of balances in the account may only be used for the purposes of (a)(i) of this subsection.
     (f) School districts and schools ((shall)) may not receive revenues distributed pursuant to (a)(i) of this subsection.
     (g) Moneys distributed to art museums, cultural museums, heritage museums, the arts, and the performing arts, and moneys distributed for tourism promotion ((shall)) must be in addition to and may not be used to replace or supplant any other funding by the legislative body of the county.
     (h) As used in this section, "tourism promotion" includes activities intended to attract visitors for overnight stays, arts, heritage, and cultural events, and recreational, professional, and amateur sports events. Moneys allocated to tourism promotion in a class AA county ((shall)) must be allocated to nonprofit organizations formed for the express purpose of tourism promotion in the county. Such organizations ((shall)) must use moneys from the taxes to promote events in all parts of the class AA county.
     (i) No taxes collected under this section may be used for the operation or maintenance of a public stadium that is financed directly or indirectly by bonds to which the tax is pledged. Expenditures for operation or maintenance include all expenditures other than expenditures that directly result in new fixed assets or that directly increase the capacity, life span, or operating economy of existing fixed assets.
     (j) No ad valorem property taxes may be used for debt service on bonds issued for a public stadium that is financed by bonds to which the tax is pledged, unless the taxes collected under this section are or are projected to be insufficient to meet debt service requirements on such bonds.
     (k) If a substantial part of the operation and management of a public stadium that is financed directly or indirectly by bonds to which the tax is pledged is performed by a nonpublic entity or if a public stadium is sold that is financed directly or indirectly by bonds to which the tax is pledged, any bonds to which the tax is pledged ((shall)) must be retired. This subsection (3)(k) does not apply in respect to a public stadium under chapter 36.102 RCW transferred to, owned by, or constructed by a public facilities district under chapter 36.100 RCW or a stadium and exhibition center.
     (l) The county ((shall)) may not lease a public stadium that is financed directly or indirectly by bonds to which the tax is pledged to, or authorize the use of the public stadium by, a professional major league sports franchise unless the sports franchise gives the right of first refusal to purchase the sports franchise, upon its sale, to local government. This subsection (3)(l) does not apply to contracts in existence on April 1, 1986.
     (4) If a court of competent jurisdiction declares any provision of ((this)) subsection (3) of this act invalid, then that invalid provision ((shall be)) is null and void and the remainder of this section is not affected.
     (5) The funding mechanism under this section is known as, and cited as, the "state hotel/motel credit." After the effective date of this act, the department and any county must refer to the funding mechanism under this section in any forms, publications, or any other documents, either newly created or updated, by the term "state hotel/motel credit."

Sec. 8   RCW 82.14.480 and 2007 c 251 s 11 are each amended to read as follows:
     (1) The legislative authority of a local jurisdiction that has created a health sciences and services authority under RCW 35.104.030 may impose a sales and use tax in accordance with the terms of this chapter. The tax is in addition to other taxes authorized by law and ((shall)) must be collected from those persons who are taxable by the state under chapters 82.08 and 82.12 RCW upon the occurrence of any taxable event within the local jurisdiction. The rate of the tax ((shall)) may not exceed 0.020 percent of the selling price in the case of a sales tax or the value of the article used in the case of a use tax.
     (2) The tax imposed under subsection (1) of this section ((shall)) must be deducted from the amount of tax otherwise required to be collected or paid over to the department under chapter 82.08 or 82.12 RCW. The department ((of revenue shall)) must perform the collection of the tax on behalf of the authority at no cost to the authority.
     (3) The amounts received under this section may only be used in accordance with RCW 35.104.060 or to finance and retire the indebtedness incurred pursuant to RCW 35.104.070, in whole or in part.
     (4) The funding mechanism under this section is known as, and cited as, the "state health science and services credit." After the effective date of this act, the department and any counties, cities, or towns, must refer to the funding mechanism under this section in any forms, publications, or any other documents, either newly created or updated, by the term "state health science and services credit."
     (5) This section expires January 1, 2023.

Sec. 9   RCW 82.14.475 and 2009 c 267 s 8 are each amended to read as follows:
     (1) A sponsoring local government, and any cosponsoring local government, that has been approved by the board to use local infrastructure financing may impose a sales and use tax in accordance with the terms of this chapter and subject to the criteria set forth in this section. Except as provided in this section, the tax is in addition to other taxes authorized by law and ((shall)) must be collected from those persons who are taxable by the state under chapters 82.08 and 82.12 RCW upon the occurrence of any taxable event within the taxing jurisdiction of the sponsoring local government or cosponsoring local government.
     (2) The tax authorized under subsection (1) of this section ((shall)) must be credited against the state taxes imposed under RCW 82.08.020(1) and 82.12.020 at the rate provided in RCW 82.08.020(1). The department ((shall)) must perform the collection of such taxes on behalf of the sponsoring local government or cosponsoring local government at no cost to the sponsoring local government or cosponsoring local government and ((shall)) must remit the taxes as provided in RCW 82.14.060.
     (3) The aggregate rate of tax imposed by the sponsoring local government, and any cosponsoring local government, must not exceed the lesser of:
     (a) The rate provided in RCW 82.08.020(1) less:
     (i) The aggregate rates of all other local sales and use taxes imposed by any taxing authority on the same taxable events;
     (ii) The aggregate rates of all taxes under RCW 82.14.465 and this section that are authorized to be imposed on the same taxable events but have not yet been imposed by a sponsoring local government or cosponsoring local government that has been approved by the department or the community economic revitalization board to receive a state contribution under chapter((s [chapter])) 39.100 or 39.102 RCW; and
     (iii) The percentage amount of distributions required under RCW 82.08.020(5) multiplied by the rate of state taxes imposed under RCW 82.08.020(1); and
     (b) The rate, as determined by the sponsoring local government, and any cosponsoring local government, in consultation with the department, reasonably necessary to receive the state contribution over ten months.
     (4) Sponsoring local governments that have been approved before October 1, 2008, by the community economic revitalization board for a state contribution must select the rate of tax under this section no later than September 1, 2009.
     (5) The department, upon request, must assist a sponsoring local government and cosponsoring local government in establishing their tax rate in accordance with subsection (3) of this section. Once the rate of tax is selected, it may not be increased.
     (6)(a) No tax may be imposed under the authority of this section:
     (i) Before July 1, 2008;
     (ii) Before July 1st of the second calendar year following the year approval by the board under RCW 39.102.040 was made; and
     (iii) Before the state excise tax allocation revenues and state property tax allocation revenues for the preceding calendar year equal or exceed the amount of project award approved by the board under RCW 39.102.040.
     (b) The tax imposed under this section ((shall)) expires when all indebtedness issued under the authority of RCW 39.102.150 is retired and all other contractual obligations relating to the financing of public improvements under chapter 39.102 RCW are satisfied, but not more than twenty-five years after the tax is first imposed.
     (7) An ordinance adopted by the legislative authority of a sponsoring local government or cosponsoring local government imposing a tax under this section ((shall)) must provide that:
     (a) The tax ((shall)) must first be imposed on the first day of a fiscal year;
     (b) The cumulative amount of tax received by the sponsoring local government, and any cosponsoring local government, in any fiscal year ((shall)) may not exceed the amount of the state contribution;
     (c) The tax ((shall)) must cease to be distributed for the remainder of any fiscal year in which either:
     (i) The amount of tax received by the sponsoring local government, and any cosponsoring local government, equals the amount of the state contribution;
     (ii) The amount of revenue from taxes imposed under this section by all sponsoring and cosponsoring local governments equals the annual state contribution limit; or
     (iii) The amount of tax received by the sponsoring local government equals the amount of project award granted in the approval notice described in RCW 39.102.040;
     (d) Neither the local excise tax allocation revenues nor the local property tax allocation revenues may constitute more than eighty percent of the total local funds as described in RCW 39.102.020(28)(b). This requirement applies beginning January 1st of the fifth calendar year after the calendar year in which the sponsoring local government begins allocating local excise tax allocation revenues under RCW 39.102.110;
     (e) The tax ((shall)) must be distributed again, should it cease to be distributed for any of the reasons provided in (c) of this subsection, at the beginning of the next fiscal year, subject to the restrictions in this section; and
     (f) Any revenue generated by the tax in excess of the amounts specified in (c) of this subsection ((shall)) belongs to the state of Washington.
     (8) If a county and city cosponsor a revenue development area, the combined amount of distributions received by both the city and county may not exceed the state contribution.
     (9) The department ((shall)) must determine the amount of tax receipts distributed to each sponsoring local government, and any cosponsoring local government, imposing sales and use tax under this section and ((shall)) must advise a sponsoring or cosponsoring local government when tax distributions for the fiscal year equal the amount of state contribution for that fiscal year as provided in subsection (11) of this section. Determinations by the department of the amount of tax distributions attributable to each sponsoring or cosponsoring local government are final and ((shall)) may not be used to challenge the validity of any tax imposed under this section. The department ((shall)) must remit any tax receipts in excess of the amounts specified in subsection (7)(c) of this section to the state treasurer who ((shall)) must deposit the money in the general fund.
     (10) If a sponsoring or cosponsoring local government fails to comply with RCW 39.102.140, no tax may be distributed in the subsequent fiscal year until such time as the sponsoring or cosponsoring local government complies and the department calculates the state contribution amount for such fiscal year.
     (11) Each year, the amount of taxes approved by the department for distribution to a sponsoring or cosponsoring local government in the next fiscal year ((shall)) must be equal to the state contribution and ((shall)) may be no more than the total local funds as described in RCW 39.102.020(28)(b). The department ((shall)) must consider information from reports described in RCW 39.102.140 when determining the amount of state contributions for each fiscal year. A sponsoring or cosponsoring local government ((shall)) may not receive, in any fiscal year, more revenues from taxes imposed under the authority of this section than the amount approved annually by the department. The department ((shall)) may not approve the receipt of more distributions of sales and use tax under this section to a sponsoring or cosponsoring local government than is authorized under subsection (7) of this section.
     (12) The amount of tax distributions received from taxes imposed under the authority of this section by all sponsoring and cosponsoring local governments is limited annually to not more than seven million five hundred thousand dollars.
     (13) The definitions in RCW 39.102.020 apply to this section unless the context clearly requires otherwise.
     (14) If a sponsoring local government is a federally recognized Indian tribe, the distribution of the sales and use tax authorized under this section ((shall)) must be authorized through an interlocal agreement pursuant to chapter 39.34 RCW.
     (15) Subject to RCW 39.102.195, the tax imposed under the authority of this section may be applied either to provide for the payment of debt service on bonds issued under RCW 39.102.150 by the sponsoring local government or to pay public improvement costs on a pay-as-you-go basis, or both.
     (16) The tax imposed under the authority of this section ((shall)) must cease to be imposed if the sponsoring local government or cosponsoring local government fails to issue indebtedness under the authority of RCW 39.102.150, and fails to commence construction on public improvements, by June 30th of the fifth fiscal year in which the local tax authorized under this section is imposed.
     (17) For purposes of this section, the following definitions apply:
     (a) "Local sales and use taxes" means sales and use taxes imposed by cities, counties, public facilities districts, and other local governments under the authority of this chapter, chapter 67.28 or 67.40 RCW, or any other chapter, and that are credited against the state sales and use taxes.
     (b) "State sales and use taxes" means the tax imposed in RCW 82.08.020(1) and the tax imposed in RCW 82.12.020 at the rate provided in RCW 82.08.020(1).
     (18) The funding mechanism under this section is known as, and cited as, the "state local infrastructure financing credit." After the effective date of this act, the department or any local government, must refer to the funding mechanism under this section in any forms, publications, or any other documents, either newly created or updated, by the term "state local infrastructure financing credit."

NEW SECTION.  Sec. 10   Section 9 of this act expires June 30, 2039.